Google is Not a Monopoly [Blind Leading the Blind]

How is it possible to be head of the anti-trust division of the Justice Department and not know what the definition of monopoly is? Ask your new president and his pick for that slot, Christine Varney.

I found this tip via Truemors on a Bloomberg article wondering aloud whether or not Google may be headed for a breakup at the hands of the Obama administration:

President Barack Obama’s pick for the head of the Justice Department’s antitrust unit, Christine Varney, has strong feelings towards what she perceives as Google’s potential monopoly on online computing services. Before scoring the Obama administration gig, Varney compared the search giant to Microsoft in the 90s: “For me, Microsoft is so last century. They are not the problem. [The economy] will continually see a problem — potentially with Google [because it] has acquired a monopoly in Internet online advertising.” So, could Varney’s record of aggressive advocacy of antitrust law enforcement mean Google will have to face a possible break up?

Priceless.

I talked about this topic in October of 2007 in a response I penned for Mashable in response to Steven Hodson as to why Google seems to get this free ride:

To answer directly, though, the question of monopolies by Google, Microsoft, or anyone else in the tech business, I took myself back to basic economics class and did some research on the terminology and the math behind it. I wanted to peg this answer as best I could, and get a grasp of what our terminology means in the most literal sense. A monopoly is defined by a persistent situation where there is only one provider of a product or service in a particular market. Further, one of the main dangers, at least on the consumer side, is that monopolies inhibit innovation, slow down advancements, as well as give the monopoly holders license to raise rates for the product to heights that are considered gouging.

So, if we assume that Ms. Varney actually knows the meaning of monopoly as a term (and was just posturing in her statements to the media), then Google is quite safe.

Google is by far not the only purveyor of advertisement on the web. Certainly, they dominate the market because they are by far the most dominant website on the Internet. You can’t separate their ads from their website. You cannot give half the Google database of search results to a different search engine. It doesn’t work like that.

Meanwhile, Google isn’t inhibiting innovation. As any self-publisher will tell you, Google AdSense is the Ford Pinto of online ads. They’re crappy, doesn’t work very well, and just about anyone can afford it.

In essence, they’re encouraging innovation by sucking so badly. The first person to make an ad network that works better than Google could take the world by storm.

Given that ever since President G.W. Bush took office and continuing strongly into the Obama administration we’ve been playing fast and loose with the constitution, terminology and finance, Google may be headed for a world of hurt.